How are the Federal Housing Administration (FHA) and Ginnie Mae connected?
Ginnie Mae serves in effect as the banker for the FHA, VA and other government mortgage insurers. FHA and other government agencies insure or guarantee the lender in case of a borrower default, while Ginnie Mae insures the investor in case of a lender default. FHA insures approximately two-thirds of the loans backing Ginnie Mae securities. Lenders originate the FHA mortgage loans and package them into MBS, which are then guaranteed by Ginnie Mae. Ginnie Mae securitizes more than 98 percent of FHA mortgages. Since Ginnie Mae is wholly-owned government corporation within the U.S. Department of Housing and Urban Development, the President of Ginnie Mae and the FHA Commissioner both report to the Secretary of HUD.
Ginnie Mae serves in effect as the banker for the FHA, VA and other government mortgage insurers. FHA and other government agencies insure or guarantee the lender in case of a borrower default, while Ginnie Mae insures the investor in case of a lender default. At the end of Fiscal Year 2009, 81 percent of loans backing Ginnie Mae securities are insured by FHA, while VA-guaranteed loans accounted for 16 percent.. RD and PIH loans made up the other 3 percent. Lenders originate the FHA mortgage loans and package them into MBS, which are then guaranteed by Ginnie Mae. Ginnie Mae securitizes more than 98 percent of FHA mortgages and 96 percent of VA mortgages. Since Ginnie Mae is wholly-owned government corporation within the U.S. Department of Housing and Urban Development, the President of Ginnie Mae and the FHA Commissioner both report to the Secretary of HUD.
